Trustees of the Operating Engineers Pension Trust v. West Coast Boring, Inc.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT [15]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiffs Trustees of the Operating Engineers Pension Trust, Trustees of the Operating Engineers Health and Welfare Fund, Trustees of the Operating Engineers Vacation-Holiday Savings Trust, Trustees of the Operating Engineers Training Trust, Trustees of the Operating Engineers Local 12 Defined Contribution Trust, Fund For Construction Industry Advancement, Engineers Contract Compliance Committee Fund, Contract Administration Fund, Southern California Partnership For Jobs Fund, and Operating Engineers Workers Compensation Trust (collectively, the “Trust Funds” or “Plaintiffs”), brought suit against Defendant West Coast Boring, Inc. (“WCB”) for delinquent contributions required by the collecting bargaining agreement (“CBA”) between WCB and Local Union 12 (“Local 12”). The Trust Funds now move for entry of a default judgment against WCB. For the reasons discussed below, the Court GRANTS the Motion IN PART. (Mot. for Default J. (“Mot.”), ECF No. 15.)^[1]

         II. FACTUAL BACKGROUND

         WCB and Local 12 entered into a CBA on August 17, 2000. (Compl. ¶ 8, ECF No. 1; Decl. of Bernardo Ramos (“Ramos Decl.”) ¶ 8, ECF No. 17.) Under the CBA, WCB was obligated to make contributions to a multiemployer plan, and submit true, complete, and accurate written monthly contribution reports. (Compl. ¶¶ 14, 15.) WCB agreed to pay to Plaintiffs fringe benefit contributions, benefits and/or withholdings on a monthly basis, and at specified rates for each hour worked by, or paid to, applicable employees. (Compl. ¶ 15.) Per their agreement, if WCB paid any employee in a manner other than an hourly wage, WCB must pay Plaintiffs fringe benefit contributions on behalf of that employee based on a 40-hour work-week. (Compl. ¶ 16.) The Trust Funds also allege that, per the terms of the CBA, WCB agreed to comply with audits of payroll and related records to ensure all fringe benefits were paid. (Compl. ¶¶ 15, 28.)

         WCB submitted monthly reports from September 2018 through February 2019 but failed to pay the contributions due. (Compl. ¶ 17.) Plaintiffs allege WCB owes $17, 915.40 in fringe contributions for this time period. (Compl. ¶ 17; Ramos Decl. ¶ 14.) Furthermore, WCB allegedly failed to provide monthly reports from April 2019 through the present, in violation of the CBA. (Compl. ¶ 18.)

         Local 12 and WCB agreed to modify their agreement for WCB's principal employee Mr. Robert Sanders. (Compl. ¶¶ 16, 19.) On or about March 17, 2011, WCB signed a written Principal Employee Program Participation Agreement (the “PEPPA”), which permitted WCB to report and pay contributions on behalf of Mr. Sanders at a flat monthly rate in lieu of paying contributions based on a 40-hour workweek. (Compl. ¶ 19.) However, the PEPPA provides that if WCB fails to abide by the terms and conditions of the PEPPA, WCB must revert to paying fringe benefit contributions for Mr. Sanders based on a 40-hour work-week. (Compl. ¶ 19.)

         Furthermore, Plaintiffs claim that WCB breached the PEPPA by failing to pay the flat rate contributions for Mr. Sanders for work performed during the months of September 2018 through June 2019. (Compl. ¶ 20.) As WCB violated PEPPA, it allegedly owes Plaintiffs fringe benefit contributions of $53, 488.06 based on a 40hour work-week for the months of September 2018 through June 2019. (Compl. ¶ 20.) Due to these violations, WCB became “delinquent” per the CBA and must pay the greater of $25.00 per month or ten percent (10%) of the total amount then due as liquidated damages for each delinquency. (Compl. ¶ 24.)

         On July 29, 2019, the Trust Funds filed a complaint against WCB requesting payment of the underpaid contributions, prejudgment interest, liquidated damages, audit expenses, and reasonable attorneys' fees and costs. (See Compl.) The Trust Funds served the complaint on WCB on August 11, 2019. (Proof of Service, ECF No. 9.) WCB failed to timely respond to the complaint. See Fed.R.Civ.P. 12(a)(1)(A)(i). On September 10, 2019, the Trust Funds requested that the Clerk enter default against WCB. (Req., ECF No. 11.) The Clerk entered a default on September 11, 2019. (Default by Clerk, ECF No. 12.) On October 10, 2019, the Trust Funds filed the instant Motion for Default Judgment. (See Mot.)

         III. LEGAL STANDARD

         Federal Rule of Civil Procedure 55(b) authorizes a district court to grant a default judgment after the Clerk enters a default under Rule 55(a). Fed.R.Civ.P. 55(b). Before a court can enter a default judgment against a defendant, the plaintiff must satisfy the procedural requirements set forth in Federal Rules of Civil Procedure 54(c) and 55, as well as Local Rule 55-1 and 55-2. Fed.R.Civ.P. 54(c), 55; C.D. Cal. L.R. 55-1, 55-2. Local Rule 55-1 requires that the movant submit a declaration establishing (a) when and against which party default was entered; (b) identification of the pleading to which default was entered; (c) whether the defaulting party is a minor, incompetent person, or active service member; (d) that the Servicemembers Civil Relief Act, 50 U.S.C. § 3931, does not apply; and that (e) the defaulting party was properly served with notice, if required under Rule 55(b)(2). C.D. Cal. L.R. 55-1. Finally, if the plaintiff seeks unliquidated damages, Local Rule 55-2 requires the plaintiff to give notice to the defaulting party of the amount sought. C.D. Cal. L.R. 55-2.

         If these procedural requirements are satisfied, a district court has discretion to enter default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising its discretion, a court must consider several factors, including: (1) the possibility of prejudice to a plaintiff; (2) the merits of plaintiff's substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake; (5) the possibility of a dispute concerning material facts; (6) whether the defendant's default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Upon entry of default, the defendant's liability generally is conclusively established, and the well-pleaded factual allegations in the complaint are accepted as true, except those pertaining to damages. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-19 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).

         IV. DISCUSSION

         A. Procedural Requirements

         The Court finds that the Trust Funds have complied with the relevant procedural requirements for the entry of a default judgment. Counsel submits a declaration attesting that: (a) the Clerk entered a default against WCB on September 11, 2019; (b) the default was entered on the original complaint filed by the Trust Funds on July 29, 2019; (c) WCB is not an infant or incompetent person; (d) WCB is not covered under the Servicemembers Civil Relief Act; and (e) the Trust Funds served WCB with notice of the request for entry of default (additional notice was not required per Local Rule 55-2). (Decl. of Marija Kristich Decker (“Decker Decl.”) ¶¶ 7-11, ECF No. 18.) Accordingly, the procedural requirements are satisfied.

         B. Eitel Factors

         The Court finds that the Eitel factors weigh in favor of entering a default judgment. The ...